Why Marketing Metrics Matter to Your Business

Metrics.horizWhen it comes to measuring marketing success, many business owners (and professional marketers) prefer to think that results are more magic than math. But that’s just not so. The digital era – with it’s easy (relatively) access to analytics – has introduced a whole new way of thinking.

Using real data, business owners can now take a “show me the money” approach to measuring marketing success. Marketing metrics – as opposed to, say, website metrics – can show what works and what doesn’t with far more clarity than ever before.

If you aren’t using some type of marketing metrics or analytics, your business is flying blind. Your goal is to confidently identify which marketing efforts are delivering the best financial returns. Only then can you make the right strategic moves to improve your results over time.

With marketing dollars scarce, business owners and startup entrepreneurs are moving to methods where they can most easily measure and quantity success – or the lack thereof. Meanwhile, test-and-learn marketing (A/B testing) and other marketing tools are helping even the smallest businesses glean valuable insights into what customers and prospects actually DO rather than simply what they SAY.

Marketing Metrics vs. Website Metrics

Don’t confuse marketing metrics with simple website metrics such as page views per visit, time on site, back-links and others. The marketing data important to you includes such things as total traffic, action rates, leads, conversion rates and – ultimately – sales. Whereas web metrics focus on what’s happening with your website overall, as well as specific pages, marketing metrics are mostly about human actions – your customers and prospects.

Metrics-focused marketing starts with three main activities:

1)    Setting goals and targets up front. These should include such things as how many incremental sales are generated, how much revenue each sale produces and the gross margin. In short, you want to know precisely what impact your marketing efforts are having on revenue.

2)    Designing or selecting your marketing programs to be measurable in the first place. You’ll want to know the incremental contribution of each individual marketing effort you undertake in order to compare results.

3)    Focusing on decisions that will improve your marketing results. The idea is to adapt and make changes along the way.

Here are three key marketing metrics to consider:

  • Lead Conversion Rate: Lassoing lots of leads is great. But converting them to sales is what really counts. Your conversion rate is the percentage of leads that ultimately become sales (10 sales from 100 leads = a 10% conversion rate). This also produces insights into lead quality and how revenue can react dramatically to even small changes in conversion rates.
  • Revenue Per Customer:  Once you know how much the average customer is spending, you can make better decisions on whether to focus on new customers, selling more to existing customers, or both.
  • Customer Acquisition Cost: This boils down to what it costs you to gain a new customer. It’s a critical number to know for deciding what you can spend on your marketing efforts. If your revenue per customer is higher than your acquisition cost, you’re at least on the right track.

Metrics Missteps to Avoid

  • Vanity metrics: Avoid relying on “feel good” measurements that sound good but don’t actually measure business outcomes or improve profitability. Common examples include PR impressions, Facebook “likes” and names gathered at trade shows.
  • Focusing on quantity, not quality: The main metric of lead generation is usually quantity. But focusing on quantity without also measuring quality can lead to marketing programs that look good initially but don’t deliver profits.
  • Activity, not results: Marketing “activity” is easy to see (costs going out the door), but results are harder to measure.
  • Efficiency instead of effectiveness: Know the difference between effectiveness metrics (doing the right things) and efficiency metrics (doing – possibly the wrong – things well).
For example, having a packed event is no good if it’s the wrong people.

Lenskold Group, a marketing analytics firm, has a helpful, and free, online tool for calculating the return on investment (ROI) of your lead generation. Just put in the numbers for nine different variables and check the results. Look on the website under “ROI Resources”.

Copyright © 2000-2012 BizBest® Media Corp.  All Rights Reserved.  Follow @140Main

Related BizBest Articles of Interest

5 Free or Frugal Business PR Tools

HARO logoBusiness owners and startup entrepreneurs are always searching for low-cost and no-cost ways to promote their businesses and get their name in front of potential customers. PR is a perfect way for most  businesses to get attention and attract new customers. Nothing brings people to your door (website, Facebook page, etc.) like PR. Most businesses know this, but few have the budget to hire a PR firm. The good news is you don’t have to.

That’s because there are many free or low-cost ways to get PR via the Internet. It’s never been easier to practice your own public relations. But it takes time and effort on your part. Here are five free or frugal PR tools you can use to launch your own internal public relations effort.

1. HARO (Help A Reporter Out) is a free service from Vocus that lets you sign up to become a resource for reporters writing stories on topics in your field of expertise. From The New York Times, to ABC News, to HuffingtonPost.com and everything in between, nearly 30,000 members of the media have quoted HARO sources in their stories. Everyone’s an expert at something. Sharing your expertise may land you that big media opportunity you’ve been looking for. For a monthly fee you get more bells and whistles.

2. PRWeb is a low-cost news release creation, submission and distribution service used by many small firms. News and press releases distributed via PRWeb raise your online visibility where millions of people are searching for information. When you submit your news releases to PRWeb, they will be indexed by search engines such as Google, sent to news sites such as Yahoo! News and placed into RSS feeds with more than 250,000 subscribers that include bloggers, journalists and consumers.

PRWeb also helps you build inbound links from other premium sites, one of the most important assets to build your website’s credibility in search engines. All of this helps drive traffic by helping people find you online and click through to your website. With “advanced features” your news goes to premier news outlets such as The New York Times, USA Today and others via the Associated Press. You can also include video, attachments, images and links to engage your customers and encourage people to share your story.

One of the best parts about PRWire is all of the free help available on the site. Look in the “Tools & Tips” section for advice on how to write a good press release, common press release mistakes, best practices for online news releases, how to format your news release and more.

3. Free Press Release lets you submit releases for nothing. The basic service provides free distribution to Google News and other popular search engines. If you register (still free) you have additional capabilities to log into your account, monitor your release, and delete it. A more expansive paid service is also available.

4. Another free press release distribution service called 1888PressRelease.com sends your releases to search engines, newswires and websites. For a modest fee, you can upgrade to wider distribution. You can also attach files, logos or images to your press release if you want.

5. PitchRate.com is a free service that connects journalists with topic experts – such as small business owners – for free media coverage. Basically, it’s a place where you can get free media leads. PitchRate also offers helpful (free) information on how to get free publicity, PR tips, personal branding ideas and more. It sponsors regular free “PR Happy Hour” conference calls that let you talk live with marketing and PR experts, ask questions and get free advice.

Copyright © 2000-2012 BizBest® Media Corp.  All Rights Reserved.  Follow @140Main

8 Essentials of Successful Discounting

Discounts.horizThese days, if you aren’t offering a discount of some kind (or at least the appearance of one), you might not be selling much of anything. Pervasive discounting by businesses both big and small has caused buyers to demand deals on anything and everything.

In the midst of all this, how can business owners and entrepreneurs craft a financially sound strategy for offering discounts? The knee-jerk reaction is sometimes to cut prices willy-nilly. But don’t rush into a discount strategy. It pays to start with a plan, making certain the discounts you offer will actually help grow your business long-term, rather than shooting yourself in the foot.

No matter what, be sure to monitor and measure the results of a discount strategy. If you sell more but still lose money, it’s not helping your business.

Here are eight keys to successful discounting:

1. Make the discount relevant

Devise an offer that not only will appeal to your clientele, but also one that jibes with how those customers buy from your biz. For example, a “buy one get one free” offer might appear strong on the surface. But if you sell something that customers wouldn’t typically buy multiples at the same time, it’s not likely to work well.

2. Commit to your campaign

Whether you use social media, search engine marketing, postcards, coupon packs, email or other ads, frequency and consistency count. Prospects may see an offer but not respond right away.  Consumers look for an offer that’s appealing and has value, and may respond immediately. But with big ticket, high-commitment items they are likely to take more time to consider the offer and wait until they need to make the purchase.

3. Balance strong discounts against your bottom line

Structure discounts that get customers in the door, but still make money for your business. “Look at your product mix and look at your margins,” says King. “Because if you don’t, that’s where you’re going to get burned.” Evaluate carefully what you can reasonably offer, and don’t be afraid to exclude specific items that don’t fit the discount model (see tips below on crafting a profitable offer).

4. Set goals and measure your results

Balance results with objectives. Was your goal to generate new customers? Drive more phone calls or website visits? Promote a new product or service? Don’t just file away coupons you use to promote your discount. Take a little time to analyze the transactions. Did customers merely buy the discounted items or did they spend more while they were at your store or website? Well-planned discounting typically (though not always) prompts customers to spend more.

5. Don’t forget to prepare

Some businesses that offer a discount for the first time aren’t properly prepared for the response. If you attract customers to try your product or service, but you’re not able to serve those customers at your best level, you’re shooting yourself in the foot. Be sure to inform your staff about your discount strategy, and provide any information they need about coupons or offers. Customers may have questions, and you’ll need the answers.

6. Don’t treat discount buyers as “second rate” customers

Make every customer feel wanted, welcomed and appreciated. Training your staff to handle promotions is just as important as the offer itself.  The reason is simple: Treating people well is the key to repeat business after the discount deal is gone.

7. Don’t target only new customers

Offer extra discounts for repeat business: One way to turn new customers into repeat customers is to establish loyal customer discounts of some type. Loyalty cards (buy 9 get the 10th one free), birthday discounts and referral rewards are several examples.

8. Avoid hot water

Be careful with the wording of your discount and on-sale offers. Clearly label what’s “on sale” and what isn’t. If you advertise discounts of, say, “Up to 50% off” the Better Business Bureau suggests that at least 10 percent of the items be offered at the maximum amount off.

Profit-boosting tips for crafting a discount coupon offer:

  • Know your marginal cost: Deep discount offers work best for businesses with low marginal costs, where the price of producing an additional “unit” to sell, over and above fixed costs is low.
  • Be patient: Discount offers can hurt short-term profits but pay off later as new customers return and pay full price.
  • Block multiple purchases: Research shows that profitability drops greatly when customers are allowed to purchase multiple coupons.  Disallow multiple purchases if possible (although there’s nothing to stop buyers from setting up multiple accounts to buy your coupons).
  • Gather purchase data: If possible, find out if customers who bought your discount coupons have purchased from you before at full price. You might start by simply asking them.  Remember that coupons can re-active old customers who’ve forgotten about you or moved to a competitor
  • Consider fees: Stiff pay-to-play fees charged by Groupon and others also curb coupon profitability.  Groupon, for example, takes up to half of the coupon price, although the fee drops to 10 percent if your offer only appears following user searches and not in Groupon’s daily email.
  • Query customers: Capture as much information about coupon customers as possible, including names and email addresses, and follow up with further offers.
  • Cross-sell and up-sell: Coupon customers might buy other full-price items as well. To facilitate this, be sure to specifically offer them related items.

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10 Things Wrong With Your Website

In this age of social media and digital everything, you can’t afford to be a website weakling. If your competition has a killer online presence, and you don’t, you lose. Today’s consumers look online more than ever before.  Even business owners who think they don’t really need a “best in class” website are missing more than they think.  Based on visiting thousands of small business websites, BizBest compiled this list of 10 common mistakes that businesses make with their websites, and how to fix them:

1. Crummy Content

Thanks to the rise of social media and changes in how search engines operate, it’s now more important than ever to have high-quality content on your site. Off-topic and poorly written content won’t show up in search and makes your site look second-rate. Don’t load up on sales pitches. Instead, provide helpful tips, case studies and other info that gives customers and prospects valuable information on how to solve a problem or accomplish a task.  Avoid industry jargon and keep it conversational. A service such as HubSpot.com can help.

2. Keyword Clueless

Knowing — and using — the proper keywords for the products and services your business sells is important to online success. Even if you think you know what they are, unless you’ve used a keyword discovery tool to see the precise terms that real people are typing into search engines daily, you haven’t done it right.  KeywordDiscovery.com and the keyword tool in Google AdWords can help.

3. Social Scarcity

No website is complete today without some nod to social media.  At a bare minimum that should be a link to your Facebook page, but could and should also include Twitter, LinkedIn, Google+ and your own blog.

4. Muddy Metrics

Who’s visiting your website? Where are they coming from? What are they doing once they get there? What are the most and least popular portions of your site? What kinds of visitors are making you the most money? If you lack the answers, you’re flying blind. Sign up for a web metrics service such as Google Analytics to get a grip on what’s happening.

5. Missing Mobile

Mobile web usage is exploding, with huge  implications for small businesses that lack a mobile-friendly site. Mobile sites are designed specifically for the small screen. They are quick, easy to navigate and “thumb friendly,” which means they use large, centered buttons with “breathing room” to prevent accidental clicks. The best mobile-friendly  sites make the mobile experience local. Since customers are constantly seeking local information on their phones, your mobile site should make it quick and easy for people to find you. Google has a terrific program called GoMo (www.HowToGoMo.com) to help business owners and startups learn about mobile websites and find help setting one up. You’ll find tips, a tool to rate the quality of an existing mobile site, samples of good mobile site design, and a helpful list of vendors who can help you create a mobile presence.

6. Obvious Omissions

It’s stunning how many websites lack obvious info such as contact information, hours and location, or seemingly try to hide it. Don’t make people hunt for a “Contact Us” page. Display your preferred means of contact prominently across your site. If you make it easy for people to call or email, they will. Be sure you have a process in place to follow up all inquiries.

7. Offer-less Ordering

If you want people to sign up, order or otherwise engage, you need to encourage it with some type of offer or call to action. You could, for example, offer free trials, discounts or a newsletter. Tell people what you want them to do.

8. Dorky Design

Design counts. But it’s not all about looking pretty. It’s about creating a great user experience and being highly functional and effective at attracting, keeping and converting customers. Obvious cookie-cutter sites and over-the-top images undercut your goals. Customers are there because they want to accomplish something, and your design needs to reflect that. Keep all order and lead-generation forms simple. The more information you require, the fewer people you’ll get filling them out.

9. Laughably Link-less

If people can’t find you online, you’re toast. One thing that makes Google (and other search engines) take notice is how many quality sites link to yours. Other sites are more likely to link to yours if you offer helpful information such as tips, white papers, newsletters, a blog or other items. Sending out regular press releases on your business is one way to build links. You can also seek links from professional associations, clients and vendors.

10. Unborn Updates

Incorrect or outdated info on your website spells certain doom. If your latest press release is three years old or other content is clearly aging, customers will wonder how up-to-date and vibrant your business really is. Review and update all content on your site regularly to keep it fresh and timely.

Copyright © 2000-2012 BizBest® Media Corp.  All Rights Reserved.  Follow @140Main

13 Business Resolutions for 2013

2013Here they are, along with some of our best tips and strategies to help you pull each one off:

Resolution #1: Fix my website!

Here are 10 things that are probably wrong with your site, and how to fix them: 10 Things Wrong With Your Website

Resolution#2: Improve our customer service!

Here’s how: 8 Ways to Earn True Customer Love

Resolution#3: Be a better tweeter!

Here’s one way to do it: The Right Way to Retweet

Resolution#4: Boost my social influence!

These 16 tools can help: 16 Sweet Social Marketing Tools You Gotta Try

Resolution#5: Nurture our leads!

Become a lead nurturing pro: 9 Steps to Lead Nurturing Success

Resolution#6: Find a business mentor!

Here’s how & where: 8 Places to Find Your own Free Business Mentor

Resolution#7: Launch a new product or service!

And when you do, here’s how to market it! 14 Ways to Market a New Product or Service

Resolution#8: Try A/B testing!

Here’s what you need to know:  The Magic of Test-and-Learn Marketing

Resolution#9: Keep better books!

These basics will get you there: The 10 Bookkeeping Basics You Can’t Ignore

Resolution#10: Get serious with Facebook!

Can’t go wrong with this Facebook cheat sheet: A 10-Step Facebook Cheat Sheet for Biz Owners

Resolution#11: Network more!!

These tips will really help: 9 Ways to Make your Contacts Really Count

Resolution#12: Review our pricing!

There’s more to pricing then you think: What Every Business Should Know About Pricing

Resolution#13: Innovate more!

Here’s how to make it happen: 4 Rules for Fostering Innovation in Your Business

Copyright © 2000-2012 BizBest® Media Corp.  All Rights Reserved.  Follow @140Main

6 Things that Growing Businesses Do Right

growthWhat sets growing businesses apart from their biz brothers and sisters whose revenues are flat or falling? Based on a recent study that compared small firms with rising revenues against their counterparts with flat or declining sales, here are the six practices that stood out:

1. Planning Ahead

Business owners who managed to grow in the face of economic weakness were adept at planning for what might go wrong, rather than simply reacting to trouble. When times were good, these well-prepared businesses squirreled away cash reserves and opened credit lines that helped them weather tough times without having to make cutbacks.  In contrast, owners with declining revenues found themselves madly rushing to slash expenses as difficulties mounted.

2. Borrowing Strategically

Growing businesses understand that borrowing can be a good thing (especially since interest is tax deductible) if the money is put to good business use.  And the use that has paid off best for growth firms is R&D. About 58% of high-growth small business owners report that R&D type investments yielded the most positive returns. On the other hand, borrowing to open new offices, build production facilities or add new capabilities was more likely to correlate with a DROP than an increase in sales. Likewise, borrowing to add staff was generally a money-losing endeavor.

3. Sharpening Management Skills

Professional development also leads to more income. Business owners who improved their skills at strategic planning and money management, for example, had a better chance of achieving revenue growth than those who didn’t.  But the most compelling results came from those who got better at hiring the right people. Team building skills, it turns out, are great for boosting a bottom line.

4. Getting Good Advice

Business owners have always relied on advice from friends and fellow entrepreneurs. That never changes.  But the best of them also make sure they plug into a savvy accountant or other financial advisors to provide the kind of professional fiscal advice that every business needs, no matter what size.  For example, 68% of businesses with rising revenues sought out financial advisors, while only 51% of those with declining revenues took that step.

5. Balancing Business and Life

Revenue-boosting business owners tend not to be all-consumed by their businesses.  They’ve learned to balance involvement with family, friends and their communities.  In short, they run their businesses – not the other way around.  Conversely, business owners whose revenues decline tended to be more fiercely independent and obsessed with their companies at the expense of other parts of their lives.

6. Sharing Vision

There’s also a strong correlation between success (in terms of revenue growth) and business owners who were strong leaders and adept at sharing their vision with employees, colleagues and others.  In addition, it was critical for business owners to demonstrate commitment to the business and inspire teams to perform at their highest level.

If you’re not among the ranks of revenue risers, take these six differentiators to heart as you plan your year ahead. By following in the footsteps of success, you’ll have a better chance of increasing revenues no matter what’s happening in the economy around you.

Copyright © 2000-2012 BizBest® Media Corp.  All Rights Reserved.  Follow @140Main

A New National Network of Startup Communities

startupamericaWhen I first wrote about the non-profit Startup America Partnership in early 2011 (Why You Should Join Startup America), it had just launched with much fanfare and a lofty mission of helping to inspire and accelerate high-growth entrepreneurship in the U.S.  It was announced at the White House, although it’s not a government program and receives no government funding.

Back then, I said, “Any business owner or entrepreneur – from startup (newly created), to ramp-up (initial growth stage), to speedup (going like gang busters) – should be ready to tap this free resource when the help starts flowing.”

Well, the help is flowing freely and my original advice holds:  If you are in or around the startup space, getting involved with Startup America in your area will be well worth your while. (To join the network, go here and select your state or region.)

Startup America has quickly evolved from a kind of resources clearinghouse into a fast-growing national network of local and regional startup communities. Its leaders quickly recognized that to be effective at serving entrepreneurs who exist everywhere in different industries with wildly different needs, it had to do it region by region, state by state, city by city. Too many entrepreneurs are disconnected from each other; from their communities; from their towns, cities and states; from potential customers, funders and talent; and from the resources that could help them.

Building a National Network

Startup America aims to help by developing a national network of startup communities that include mentors, role models and fellow entrepreneurs who can sustain and validate each other. It is creating visible networks so that a startup in one city can be connected to other startups and leaders in that city, as well as to those in adjacent cities and to the entire country.

So far, Startup America has grown to nearly 12,000 members (you can view the member directory here).  Here’s an interesting breakdown of Startup America membership by state. Also check out dozens of helpful webinars available on the website.

California, which (as you might expect) has the largest member count of any state, is home to one of the most advanced regional initiatives and has a super-helpful website chock full of startup resources. These include places to find capital, mentors and crowd funding, among others.

(Note: BizBest’s Silicon Beach shortLIST has details on the startup community in Southern California, considered one of the fastest growing and most dynamic worldwide.)

State Experiences

Here’s what some of the regional Startup America leaders had to say recently about their unique startup environment, goals and challenges:

  • Florida is awash in high net worth capital, but the rich are not used to investing in startups. The state’s most talented entrepreneurs often leave for startup hubs in Boston, North Carolina, Austin, and Silicon Valley. There are 430,000 micro-businesses, with one to nine employees, which need help scaling.
  • Iowa said it had a good community of startups in IT, software, biosciences, and materials. The challenge was finding them all and getting them to venture out of their silos. There is enough venture capital money for rounds of $250,000 and up, but little for seed rounds of much less.
  •  Nebraska’s challenge was “to be identified by more people on a map.” It finds it hard to attract and retain talent, from developers to marketing and sales. It works closely with Iowa to create an easily identifiable Silicon Prairie region.
  • Texas has a lot of venture-ready money, but struggles to get it into the hands of entrepreneurs. The startup communities are based around cities—Austin, Dallas/Fort Worth, Houston, San Antonio, and El Paso—rather than statewide. Collaborating between these city-based communities is difficult.
  • Connecticut has money but no sense of a startup community. Everyone working to support startups is working separately. The state is attempting to create what it calls a “greased-skid system” of innovation clusters.
  • Massachusetts’ problem was “having too much” and getting the different organizations and people to collaborate. It wanted to expand the startup community beyond Boston to less-dynamic parts of the state and keep students in the state after graduating from Massachusetts’ many colleges.
  • Colorado’s plan was to use the success of its startup community in Boulder as a model for Fort Collins, Denver, and Colorado Springs, and to build deeper links between different industries.
  • Virginia said that it had very strong technology pockets, as well as some of the wealthiest and poorest parts of the country. The Defense Advanced Research Projects Agency (DARPA) spends a lot of its money in northern Virginia, but other parts of the state struggle economically. Many organizations claim to help entrepreneurs, but they are highly fragmented with no central authority. The main challenge was pulling together the various parts of Virginia into one startup community.
  • Maryland boasted of plenty of government support and interest in startups from the governor’s office down. The challenge was in catalyzing the state’s entrepreneurial spirit. A startup bus has driven around the state, inviting people to come aboard and pitch, garnering significant media attention.
  • Indiana called its startup community an “uprising.” In Indianapolis, there’s Developertown, raw office space where developers can build and park their own structures. What entrepreneurs needed was to be “less aw-shucks and modest.”

Copyright © 2000-2012 BizBest® Media Corp.  All Rights Reserved.  Follow @140Main

6 Social Media Changes That Will Rattle Business

LikeSocial media has already had a huge impact on businesses both large and small. But according to the latest projections from the research firm International Data Corp. (IDC), there’s a lot more change coming. IDC analysts expect the coming year to be pivotal for social media in business with (among other things) a new emphasis on using social to grow profits, not just gather followers.

New social-friendly devices and computer operating systems will spur growth of so-called “social business” – business conducted via social media. New types of “discovery” shopping will evolve from a combination of tablet usage and an emphasis on visual, rather than text-based messages.

Drawing from the latest IDC research and internal brainstorming sessions among IDC’s analysts, here are six key social business and social media changes that could have a major impact on how you do business in the year ahead (follow us @140Main or check BizBest’s Social Media section for future updates):

1. Social platforms become the new shop fronts

Until now, most businesses have used social media as an extension of their public relations or marketing efforts, focusing attention on such things as news and updates. But as more and more small companies expand sales and customer service efforts to multiple channels, social media will become a true social business platform. In essence, social media will spawn digital storefronts for everything from local businesses to multinational corporations.

2. Sales supersede “likes” and followers

As business owners and marketers in general continue gaining experience with Facebook and other social platforms, they will become more demanding about the return they get on their social media investments. With businesses questioning the actual value of “likes”, fans and followers, attention will shift to real results and outcomes of social media efforts. It will become increasingly important to measure and track results from social media, and apply the information to your own definition of success.

3. Visual social takes off

Online marketing efforts that include a visual component (images, video, info graphics, etc.) get better results than text-only. As this sinks in, social platforms (Facebook, Google+, Twitter, LinkedIn) will add new features and focus on visual networking.  The success of the image-sharing site Pinterest is just one example of how popular and effective visuals have become in the digital world. The increasing popularity of tablets such as iPads – which are great for visuals – help drive this change. The newspaper industry currently has a major joint effort underway to reinvent the standard circular into a whole new digital discovery experience for tablet (visit Wanderful.com for info).

4. Groupon’s last gasp

As Groupon continues to struggle and face competition from countless similar services, the Groupon approach will give way to new types of group purchasing conducted via social media communities and what’s being called “Social Local Mobile.” In SoLoMo, local businesses make offers directly to customers on their mobile devices.

5. Social business gets a boost from new devices and operating systems

Apple and Microsoft are both integrating social into the newest versions of their mobile and desktop operating systems. As a result, social media will become an easier experience for the user and more effective for businesses that understand and leverage the new social business environment. With the release of each new device and system, the social media experience becomes a more integral part of everyday life for customers and prospects.

6. Gap between “haves” and “have-nots” widens

Despite the massive growth of social media, business owners and executives remain polarized on the role social media should play in running a business. The pro-social camp will continue to explore social not just as something new and shiny, but also as the very foundation of their businesses. They will expand their efforts on multiple fronts. The social doubters, on the other hand, see Facebook’s 2012 stock offering debacle as confirmation that the value of social media remains in question. This will give the social media adopters a continued advantage, just as businesses that embraced the Internet early on gained an edge.

Copyright © 2000-2012 BizBest® Media Corp.  All Rights Reserved.  Follow @140Main

The 10 Bookkeeping Basics You Can’t Ignore

Millions of business owners and startup entrepreneurs are masters at creating great products and services, building awesome teams and winning over customers. Many of them, however, would probably flunk basic bookkeeping.

But if you don’t understand the different types of “accounts” your bookkeeper uses to organize your finances, measuring the success (or failure) of your efforts will be futile.  Being deft at digital marketing, for example, isn’t enough if you don’t have a clear financial picture of your business and run headlong into cash flow problems.

What do your accounts receivable look like? Are you constantly paying your own bills late? Not sweating the small stuff like understanding your own books is trouble in the making, says Lita Epstein, who designs online courses about reading financial reports and is the author of Bookkeeping Kit for Dummies (Wiley, 2012).

Here are basics of the 10 most common types of bookkeeping accounts for a small business that you should know:

  1. Cash. It doesn’t get more basic than this. All of your business transactions pass through the Cash account, which is so important that often bookkeepers actually use two journals—- Cash Receipts and Cash Disbursements — to track the activity.
  2. Accounts Receivable. If your company sells products or services and doesn’t collect payment immediately you have “receivables” and you must track Accounts Receivable. This is money due from customers, and keeping it up to date is critical to be sure that you send timely and accurate bills or invoices.
  3. Inventory. Products you have in stock to sell are like money sitting on a shelf and must be carefully accounted for and tracked. The numbers you have in your books should be periodically tested by doing physical counts of inventory on hand.
  4. Accounts Payable. No one likes to send money out of the business.  But it’s a little less painful if you have a clear view of everything via your Accounts Payable.  Good bookkeeping helps assure timely payments and – importantly – that you don’t pay anyone twice.  Paying bills early can also qualify your business for discounts.
  5. Loans Payable. If you’ve borrowed money to buy equipment, vehicles, furniture or other items for your business, this is the account that tracks what’s owed and what’s due.
  6. Sales. The Sales account is where you track all incoming revenue from what you sell. Recording sales in a timely and accurate manner is critical to knowing where your business stands.
  7. Purchases.  The Purchases Account is where you track any raw materials or finished goods that you buy for your business. It’s a key component of calculating “Cost of Goods Sold” (COGS), which you subtract from Sales to find your company’s gross profit.
  8. Payroll Expenses.  This is the biggest cost of all for many businesses. No matter how much you beg, few people want to work for nothing.  Keeping this account accurate and up to date is essential for meeting tax and other government reporting requirements. Shirking those responsibilities will put you in serious hot water.
  9. Owners’ Equity.  This account has a nice ring to it. Basically, it tracks the amount each owner puts into the business. “Many small businesses are owned by one person or a group of partners; they’re not incorporated, so no stock shares exist to divide up ownership,” says Epstein. “Instead, money put into the business is tracked in Capital accounts, and any money taken out appears in Drawing accounts. In order to be fair to all owners, your books must carefully record all Owners’ Equity accounts.
  10. Retained Earnings. The Retained Earnings account tracks any of your company’s profits that are reinvested in the business and are not paid out to the owners. Retained earnings are cumulative, which means they appear as a running total of money that has been retained since the company started. Managing this account doesn’t take a lot of time and is important to investors and lenders who want to track how well the company has done over time.

Many business owners think of bookkeeping as an unwelcome chore.  But if you understand and make effective use of the data your bookkeeper collects, bookkeeping can be your best buddy, helping  you run your business more effectively.

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8 Ways to Earn True Customer Love

Many businesses are content if their customers seem “generally satisfied” overall. Others aspire to something more — they seek the kind of passionate customer satisfaction that inspires glowing thank you letters and backyard fence (or social media) recommendations.

If you suspect customers aren’t quite feeling that kind of love for your business, you’ve probably got some work to do. In a sense, customers who aren’t wholeheartedly with you might as well be against you. Customers who lack the love factor can actually be more damaging to your business than those who do business with your competitors.

That’s because people who aren’t yet customers of yours might at least try you out in the future. But those who are blasé about your business have already tried out your product or service and found you lacking in some respect. That’s not good.

Earning true customer loyalty – the kind that translates into recommendations and referrals – takes commitment, innovative ideas, energy and a little old-fashioned elbow grease. You, as business owner, must clarify for everyone else just what it is you want to accomplish with customers. This includes partners, employees, vendors and others who support what your business does.

And lest we forget, customer “love” also translates into a better bottom line. A recent American Express survey found that 75% of small business customers are willing to spend more with businesses that provide great service – up from just 58% two years ago.  And here’s the kicker: A hefty 78% of consumers have bailed on a transaction or not made an intended purchase because of poor service.

Here are eight things that will help customers find the love:

1. End the obstacle course

Take the initiative to find out when customers need (or will soon need) service or help – before they have to ask. The magical customer service moment is when your call, email or postcard offering help arrives at the precise moment the customer needs it.  Meanwhile, make it clear to each and every customer exactly how they can get service or help from your business when they need it – including a name and contact information.

2. Avoid customer hot potato

Whenever possible, the person who speaks to a customer first should “own” that customer for the duration of their visit. Companies send signals of disrespect by passing off a customer to “someone who can better help you with your problem.”  Yeah, right.

3. Streamline your website

Many small business websites seem cobbled together – a collection of different areas with different terminology and logic for getting around. Figure out one look and message you want to send, and stick with that.

4. Fix (for real) the big issues bugging your customers

Millions of businesses ask, ever so thoughtfully, “How can we improve?” That’s good. But how many really listen and act on what they hear? Customers read inaction as lack of caring and won’t bother to respond the next time you ask. A business that makes changes based on what it hears from customers earns more love.

5. Invest in customer loyalty

Customers have had it with loyalty programs that are just too much work or offer skimpy benefits. Try offering customers something without them having to ask or pay extra for it.

6. Offer customers real choices

Don’t bind customers into the fake choice of letting them “opt out” of something. Let them know up front that they can decide to get emails, offers or whatever from you and give them a choice.

7. Make someone responsible

Maybe it’s you. Or perhaps you make it part of someone else’s responsibilities. Either way, you call attention to your company’s passionate and persistent commitment to customer care. Be sure to reward employees publicly for exceptional customer care performance.

8. Put your money where your mouth is

Define specific customer care objectives that are right for your business, put some resources behind them, and figure out how you will measure the results.

Copyright © 2000-2012 BizBest® Media Corp.  All Rights Reserved.  Follow @140Main